A month after a bankruptcy judge ruled Yellow Corp. failed to provide detailed enough notice to employees about their termination when the trucking company shut down in July 2024, two separate class-action lawsuits against the firm have been settled.
Two separate groups of claimants—approximately 3,200 non-union employees and a group of 482 mostly union workers—settled for undisclosed amounts. Of the non-union workers, 2,700 of them already signed severance agreements releasing Yellow from further liability.
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Across the combined lawsuits, the former workers had sought north of $240 million in claims.
The first of the suits was filed in August 2023, when an employee accused the defunct less-than-truckload (LTL) carrier of failing to provide advanced Worker Adjustment and Retraining Notification (WARN) Act notices to employees prior to their mass layoffs.
Yellow terminated most of its non-union workers on July 28, 2023, just two days before the company folded. When the company officially ceased operations, all the remaining workers and Teamsters-represented employees got the axe.
In total, nearly 30,000 workers were out of a job when Yellow filed for bankruptcy and closed up shop two summers ago, with 22,000 of them belonging to the Teamsters.
The LTL had maintained that it didn’t have enough time ahead of the shutdown to provide the usual 60 days’ notice as required under the WARN Act. However, the company said it fell under various exceptions that allowed the notice period to be shortened.
Judge Craig Goldblatt agreed that the exceptions were applicable to Yellow’s defense at the time, but that the form of notices given to both union and non-union employees “did not contain enough facts adequately to justify the reduced notice.”
The remaining 22,000 Teamsters members are awaiting to see if one of Yellow’s claimed exceptions, a “liquidating fiduciary” defense, will entitle them to claims.
Under that defense, Yellow says it was no longer a business enterprise by the time it provided the notices. However, the trucking company didn’t fit this designation until completing its last shipment on July 30—the day the company ceased operations. If Judge Goldblatt determines the notices were given before the last delivery was completed, the Teamsters would gain access to the claims.
At the trial, Yellow could still see a reduction in some class-action claims on the basis that the trucking company acted in good faith throughout the issuing of the WARN Act notices.